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First Federal Savings Bank of California v. Federal Savings and Loan Insurance Corp.

filed: July 15, 1991.

FIRST FEDERAL SAVINGS BANK OF CALIFORNIA, PLAINTIFF-APPELLEE,
v.
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, IN ITS CAPACITY AS RECEIVER OF SUN SAVINGS & LOAN ASSOCIATION; RESOLUTION TRUST CORPORATION, AS RECEIVER OF FIRST SAVINGS OF AMERICA, A FEDERAL S & L ASSOCIATION, AS SUCCESSOR TO FIRST SAVINGS OF AMERICA, AND ITS PREDECESSORS; TICOR TITLE INSURANCE COMPANY OF CALIFORNIA, DEFENDANTS-APPELLANTS



Appeal from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding; D.C. No. CV-89-2892-SVW.

Schroeder and Reinhardt, Circuit Judges, and King,*fn** Senior District Judge.

MEMORANDUM

On a motion for summary judgment, the trial court found that there was no issue of triable fact as to whether an additional loan of $300,000 from Sun Savings and Loan Association to Leonard A. Bloom was secured by real property owned by Marquee (a Delaware Corporation of which Bloom was an officer), which had been pledged to Sun for an earlier loan of $2,000,000. Our review of the record shows that there are, at least, genuine issues of material fact as to the effect the second "Modification Agreement" had upon the amount secured by Sun's deed of trust to the pledged property. Further, assuming that Sun's deed of trust was modified to secure the $300,000 additional loan, genuine issues of material fact exist as to First Federal Savings Bank of California's knowledge of Sun's additional $300,000 security interest in the pledged property. If First Federal did have actual notice that the amount secured by Sun's deed of trust was $2,300,000, then First Federal's security interest in the property would not be senior to any portion of the loan from Sun Savings. See Cal. Civ. Code ยง 1217.

Thus, the trial court's conclusion that, as a matter of law, First Federal's security interest in the pledged property was senior to the $300,000 additional loan was erroneous. Because material issues of fact remain, summary judgment in favor of First Federal should not have been granted.

REVERSE ...


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